2-Star Stocks Poised to Plunge: Travelzoo?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online travel deal company Travelzoo (NAS: TZOO) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Travelzoo's business and see what CAPS investors are saying about the stock right now.

This stock has no dominant market niche and few barriers to entry. ... In the last three years margins have continued to erode. ... A better bet is [Expedia] or [priceline] as well as numerous travel industry stocks. Insiders have been dumping large numbers of shares.

Travelzoo's claim to fame is their entrance into the social coupon frenzy that seems to have gripped investors. Unfortunately for a lot of them, it's not as profitable as it seems. ...

The company's management is very suspect to me right now since they are just chasing a fad and are willing to risk a lot of margin for it. Not to mention it is overpriced and has no real credible advantage in the exploding market for social marketing. ... I'm not sure if I want to be in a fad company that will surely be taken down by the many competitors i.e. livingsocial, google, and the million of other sites that are catering to this niche.

What do you think about Travelzoo, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!